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2024 Outlook: A Test for the Singapore Property Market

Just three years ago, few would believe that S$2000 psf for private homes in RCR (Rest of Central Region) and OCR (Outside Central Region) is a possible price point. Yet, that psychological barrier has been broken in 2023 with most of the new launches in these regions hitting S$2000 psf and above.


This comes at the tail end of rapid growth in home prices in the past few years. In 2021, private home prices rose 10.6%. In 2022, private home prices rose 8.4%. It's expected that we might be looking at 7% in 2023.


While we are seeing signs of prices stabilising in Q2 and Q3 of 2023 this year, I personally believe that 2024 will be a true test for the Singapore Property Market with several key trends.


First, the number of MOPed flats continues to drop in 2024. This represents an even smaller pool of potential HDB upgraders in 2024 compared to 2023.



Based on 2024 projection of new launches, there should be 8,800 units across 23 projects to be made available. Among these 8,800 units, half is expected to be in the OCR. This is a pretty huge number. For most of the HDB upgraders, they will usually target the OCR due to the lower quantum value associated with OCR projects. With less potential HDB upgraders in 2024 and a significantly large number of new launches in OCR in 2024, this could put these new launches into a tough test.


Secondly, the projects in the Core Central Region (CCR) will continue to be impacted under the various cooling measures implemented this year. We have already see new sales in the Core Central Region dropping 43% QoQ to 253 units in Q3 despite more units being launched. This signifies that the cooling measures which include a new 60% ABSD on foreigners have start to take effect. The main target audience for projects in CCR are mainly foreigners so it's reasonable to expect that the recent cooling measures has and will continue to dampen the buying sentiments of the foreigners. While Singapore is still an attractive country of choice for housing purchases due to better affordability compared to other big cities like New York, London, and Hong Kong, it's definitely expected that some impact to the sales of such projects in CCR will still happen. Only close to 20% of the new launches next year will be in the CCR region but these projects are to be watched to better understand the market sentiments of these affluent investors.



Thirdly, resale projects in the Rest of Central Region (RCR) have had a good run in recent months and it will be interesting to see if this trends continues. In October, we have the smallest price gap between resale condos in Rest of Central Region (RCR) and Core Central Region (CCR) in 22 years. Since the onset of the pandemic, we have already started to see the gap narrowing. In the recent quarter, the median prices of resale condos in CCR climbed 13.6 per cent to S$2,011 psf while the median prices of resale condos in RCR jumped 26.8 per cent to S$1,711 psf. This is likely due to some investors or homeowners deciding to move to city fringe condos to enjoy a better quantum for a larger unit. And of course, the projects in CCR aren't exactly doing very well over the recent months so the gap naturally also narrows. It will be interesting to observe if the homes in RCR will continue the good run in 2024.


Overall, the property market will likely show further signs of cooling in 2024 after almost three years of phenomenal growth. We have already noticed that developers are becoming more cautious when they do not actively bid for land plots even though some of them are land-starved. In a recent Jalan Tembusu private housing site, only 2 bids are received. Developers probably have the most complete ground knowledge on the property market. When they start to slow down, it's important for the rest of us to take notice.


Having said that, I do believe good projects, especially those near to MRT stations and good schools with plenty of surrounding amenities, will continue to do well in 2024. We have already seen key projects like J'den and The Reserve Residences having tremendous successes on their launch days even though they are priced at a premium. This shows that buying sentiments for good projects are strong. Buyers have the budget, but they are more selective on what projects to invest in. Hence, we might be seeing poor sales for the less desirable projects in 2024. This will be unlike the situation in 2022 and 2023 when we see almost every other project having an almost sold out situation on their launch days.


Another silver lining in the cloud is that interest rates will likely start going down in 2024. This will allow buyers to be more willing to take on more risks in their property purchase and this might help the overall property market. If the economy remains stable with interest rates cut, the property market should have a considerable lift. However, things could turn south quickly if we start to slip into a recession in 2024. Risks of a recession are apparent though most people are confident that the Singapore economy should continue to remain resilient.


2024 will be a big test for the property market scene in Singapore. Do you think that the property market will continue to do well? Join my Telegram channel to vote! There are already more than 210 participants in the channel. What are you waiting for!

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